Canada International Relations – Trade 2017-2018

Written by  //  October 13, 2018  //  Canada, Trade & Tariffs  //  No comments

Canada-U.S. 2015-17
NAFTA Negotiations
Trans-Pacific Partnership (TPP) and after
NAFTA Three Amigos

13 October
NAFTA talks forced Canada to pick a side in U.S.-China trade war
In signing on for NAFTA 2.0, Canada also joined the Trump administration’s China agenda
(CBC) As the U.S.–China tariff war escalated, Canada might have preferred to stay neutral. But once the Trump administration stopped exempting Canada from steel and aluminum tariffs, then threatened more tariffs on cars, the Trudeau government had to pick a side.
Even a charitable reading of what Canada accomplished in the renegotiation of the North American Free Trade Agreement suggests these tariffs worked as leverage for the Americans.
For Canada, it was better to be inside an American tariff wall than outside. But even as it continues to demand the removal of “national security” tariffs on principle, Canada’s signature on this text helps normalize such tariffs as a legitimate trade tool.

12 October
Andrew Coyne: Whatever concessions Liberals made in NAFTA, there’s plenty more they can’t blame on Trump
In some areas the Trudeau government seems to have taken the opportunity to insert certain changes unbidden, in line with their own ideological preferences
While the Chapter 19 binational dispute settlement panels were retained, and a sunset clause mostly averted, trade in autos is now subject to a raft of restrictions that will shelter uncompetitive manufacturers and drive up prices for consumers: higher North American content quotas, new “non-Mexican” quotas (setting how much content must be produced by workers earning more than $16 an hour), plus agreement that Canadian and Mexican cars would be exposed to Sect. 232 “national security” tariffs when either country’s exports exceed a certain quota.
Perhaps these concessions were unavoidable. But in other areas the Trudeau government seems to have taken the opportunity of the talks to insert certain changes unbidden, in line with their own ideological preferences. It wasn’t Donald Trump, I suspect, who insisted on scrapping NAFTA’s Chapter 11 investor-state dispute settlement process, which protected foreign investors from arbitrary discrimination and expropriation.
Neither was it Trump, I am certain, who demanded removal of the agreement’s proportionate energy-sharing provision, which prevented federal governments from diverting cross-border energy flows in favour of domestic customers, as they had done under the National Energy Program.
These are being claimed as “wins” for Canada, but in fact they are only wins for government. To the extent they have any effect, it can only be to restrain trade and discourage investment in this country. The “Trump made us do it” excuse only stretches so far.

17 September
Tories trash Trudeau trade tactics on NAFTA in preview of fall priorities
(Global) Stalled NAFTA talks and the use of tariffs as a pressure tactic by U.S President Donald Trump in recent months have prompted significant discussion about the need for Canada to diversify its trading partners and become less reliant on the Americans.
The legislation coming before MPs for debate now will ratify the 10-member free trade agreement with Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Trump yanked the U.S. out of the original version of that deal, the Trans Pacific Partnership, shortly after coming into office.
Canada joined negotiations towards the now-defunct Trans Pacific Partnership under the former Conservative government.

20 July
Internal trade focus shifts to First Ministers Meeting after premiers fail to agree on alcohol imports
Canada’s premiers have announced a few small steps toward reducing trade barriers within the country, but failed to agree on how to ease the rules that limit the amount of alcohol Canadians can transport across provincial borders.
Premiers did agree however on a specific list of other areas where they will take “immediate and meaningful” action to harmonize regulations and reduce red tape

19 July
African free-trade zone could create opportunities for Canadian exporters
As Canada moves to diversify its trade away from traditional U.S. markets, there are signs that a new African free-trade bloc could emerge as one of the targets of the revamped Canadian strategy.
Prime Minister Justin Trudeau created a refocused and renamed Department of International Trade Diversification in his cabinet shuffle on Wednesday, with Manitoba MP Jim Carr as its minister. The department is expected to focus on Asian and Latin American markets to supplement the increasingly difficult U.S. market, but Africa is likely to be another potential target.
African markets could prove attractive to Canadian exporters in industries such as agriculture, health sciences and environmental technology, analysts say.
The African free-trade zone would include 55 countries – more than any other trade agreement since the formation of the World Trade Organization – with a total population of 1.2 billion people and a combined economy of US$3.4-trillion.
The continental agreement is expected to win enough ratifications to take effect by January, although it could take another year or two for negotiators to resolve technical questions such as “rules-of-origin” issues.

27 May
Trudeau urged to probe Chinese telecom giant Huawei’s role in Canada
Prime Minister Justin Trudeau is being urged to gather security agencies and top policy makers to determine the security threat and economic cost of transferring Canadian intellectual property to Chinese telecommunications giant Huawei Technologies.
A Globe and Mail investigation published Saturday revealed that Huawei has established a vast network of relationships with Canadian universities to create a steady pipeline of intellectual property to aid in the development of next-generation mobile networks.
The concerns come in the wake of Ottawa’s decision to block Aecon Group’s takeover by a Chinese state-owned company on national-security grounds, and follows the Liberal government’s attempts since assuming office to improve trade relations with China, possibly leading to a free-trade deal.
Huawei has committed about $50-million to 13 leading Canadian universities, including the University of Toronto, the University of Waterloo, McGill University and the University of British Columbia, to fund the development of 5G mobile technology, which it has used as a basis to file hundreds of patents. Canadian university professors have transferred full rights to their inventions to Huawei in 40 instances.

23 May
Federal government blocks sale of construction giant Aecon to Chinese interests
Innovation Minister Navdeep Bains’ office has confirmed reports sale has been scuttled
(CBC) The controversial deal between Aecon and China’s CCCC International Holding Ltd., also known as CCCI, would have been worth $1.5 billion.
“As is always the case, we listened to the advice of our national security agencies throughout the multi-step national security review process under the Investment Canada Act,” Bains said in a statement.
“Based on their findings, in order to protect national security, we ordered CCCI not to implement the proposed investment.”
The statement did not explain what specific threats to Canada’s national security surfaced during the review.

21 February
New TPP could hurt NAFTA talks because of impact on U.S.: auto sector
(iPolitics) American imports into Canada could fall by $3.3 billion under the recently rebooted Trans-Pacific Partnership, the federal government has concluded, sparking fears the new pact could hurt the ongoing NAFTA renegotiation.
The text of the 11-country Pacific Rim trade deal — a pact President Donald Trump pulled the United States out of last year — was released late Tuesday, but a Global Affairs Canada analysis of the deal also delves into the impact on the North American Free Trade Agreement talks, which are to resume in five days in Mexico City.

20 February
What does $1B in new investment between Canada and India really mean?
(Global) On Canada’s side of the deal, that means 5,800 jobs and a quarter of the billion dollars in direct investment.
The industries represented in the 66 new agreements are broad: film, pharmaceutical, steel and tech are just a few of the Indian industries expanding in Canada.
Timeline for investments into Canada vague
In many cases a timeline doesn’t exist at all – at least not publicly. Only a couple of companies have released specific details. IT firm Infosys currently operates in five Canadian cities – it plans to double its operations in the next two years.

19 February
All family and no work: Justin Trudeau’s lonely 48 hours in India
From the moment the Canadian PM landed in New Delhi to his latest trip to Gujarat, Justin Trudeau has faced a series of snubs from Modi govt.
Canadian Prime Minister Justin Trudeau, who is in India on a week-long trip, has faced a series of snubs from the Narendra Modi government. Many consider Trudeau’s perceived support to Khalistani sympathisers in Canada to be the reason for this treatment.
Talk Point: Is Modi right in cold shouldering Trudeau for his dangerous votebank politics?
Canadian Prime Minister Justin Trudeau’s visit to the Taj Mahal was also conspicuously low-key, where he was accompanied by the district magistrate. Prime Minister Narendra Modi has not even tweeted a welcome message for Trudeau, or hosted him in Gujarat. Critics say that Trudeau’s domestic pandering to Khalistani Sikh leaders in Canada may be the reason for the tension with the Indian government

17 February
Things can only get better between India and Canada
By CLEO PASKAL
(The Guardian) On 17 February, Canadian Prime Minister Justin Trudeau arrived in India for a week-long visit. He has brought his wife, three children, and some of the 19 Indo-Canadian Members of Parliament elected from his Liberal Party. That includes four Sikh Cabinet Members. Canadian Ministers of Defence, Foreign, and Trade are all a part of the delegation.
It’s a serious delegation, in India for a relatively long visit. Trudeau and his team will try to show their hosts that Canada-India relations extend far beyond the 1.3 million Indo-Canadian Diaspora there, and that they can go much further still.
Getting there, though, may take some handling. In particular, touchy topics will be: Why should India care about Canada? Is Canada doing enough on the Khalistan issue? Is this trip about domestic Canadian politics or international relations?
There was $8.3 billion in merchandise trade in 2017—there is room for much more, especially in a range of critical commodities and resources (Canada sells everything from pulses to uranium to India) but also in software, aeronautics, power generation, etc. Additionally more Indian parents are opting to send their kids to Canada’s safe and reputable universities, and more techies are looking to Canada rather than south of the border.
National level politics aside, these trends are likely to increase, assuming barriers aren’t put in their way. Ideally, the era of relative neglect is over in both capitals.

23 January
Canada reaches deal on revised Trans-Pacific Partnership
Canada was seen as a barrier during trade talks in Vietnam last fall
(CBC) Canada has agreed to a resurrected version of the Trans-Pacific Partnership and will sign on to the deal.
The deal, renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, comes after talks in Japan this week with the 11 countries still committed to the deal.
“We are happy to confirm the achievement of a significant outcome on culture as well as an improved arrangement on autos with Japan, along with the suspension of many intellectual property provisions of concern to Canadian stakeholders,” said International Trade Minister Francois-Philippe Champagne in a statement.
Sources say Canada made “real gains” on the pact’s labour and environment chapters, and suspended what the government saw as a problematic dispute settlement provisions and an intellectual property section.
While signing the deal is a feather in Champagne’s hat, the deal comes the same day the sixth round of talks on NAFTA kick off in Montreal.
This round is expected to be the most tense round of negotiating yet as Canada, the U.S. and Mexico dive into the most controversial chapters, including the auto and dairy sectors and a proposed sunset clause.

Canadian industries split on new TPP trade deal
(Globe & Mail) The Trans-Pacific Partnership agreement should be a boon for Canada’s agricultural sector, chiefly beef and pork producers, who want to gain the same access to the once-sheltered Japanese market that is already enjoyed by Australia.
Canada’s dairy farmers and a major portion of the Canadian auto industry, however, oppose the deal, saying it makes major concessions to foreign competitors that will cost jobs in Canada without yielding sufficient reciprocal benefits.

10 January
Canada Attacks U.S. Tariffs by Taking Case to World Trade Organization
(NYT) Canada has filed a sweeping trade case against the United States at the World Trade Organization, lobbing a diplomatic grenade at the Trump administration’s “America First” approach amid an increasingly embattled trade relationship between the longstanding North American allies. …
The case could expand into a multinational trade dispute given that Canada, a champion of global agreements, filed it in a way that allows other countries to join. The 37-page document outlines numerous problematic trade actions that it says the United States has taken against China, South Korea, Japan and Germany.
The case, which was filed on Dec. 20 and made public on Wednesday, centers on the punitive tariffs that the United States imposes when it finds other countries guilty of subsidizing their products or of selling them abroad at unfairly low prices, a practice known as dumping. The United States has lost cases in the World Trade Organization over this system, which differs substantially from that of many countries.

2017

8 December
(Globe & Mail) Mr. Trudeau is returning from China empty-handed but the Liberals are planning on doubling down on their progressive trade policies. Employment Minister Patty Hajdu will be meeting with labour unions today in advance of the next round of NAFTA negotiations. Trade Minister Francois-Philippe Champagne, on the other hand, will be in Argentina this weekend for a World Trade Organization ministerial conference. He’s expected to bring up gender equality, labour rights and environmental sustainability, a government official told The Globe’s Bill Curry.

7 December
Trudeau’s China setback was a self-inflicted wound
By David Mulroney, former ambassador to China
(Globe & Mail) … Trade negotiating, once an elite art in Ottawa, is now a more mundane bureaucratic function. Back when the Canada-U.S. free-trade agreement and NAFTA were negotiated, we fielded a team of deeply experienced negotiators, giants in a discipline in which Canada then wielded global influence. They worked closely, often directly, with ministers and with the prime minister. There were few – if any – surprises.
Today, the distance between the people who negotiate the deal and the person who signs it – the prime minister – is far greater, and many other people, among them congenitally cautious mandarins from Ottawa’s “central agencies” and legions of hyperpartisan political staffers, stand between negotiators and the PM. That makes us more susceptible to second-guessing and last-minute surprises..
… We do need to raise issues with China relating to human rights, labour and the environment. But before trying to shoe-horn them into our trade agreement, we should build them into our broader engagement strategy. Instead, the government’s failure to address legitimate Canadian concerns about these issues has undermined the popular support needed to get a trade deal done.

5 December
Trudeau blew it in Beijing. That’s the good news
By Jonathan Manthorpe
(iPolitics) It was well-flagged in advance that Justin Trudeau’s visit to China this week was for the purpose of launching formal free trade agreement talks.
But there is no credible, conceivable scenario which would see such a pact benefit Canadians. The CCP is never going to allow Canadian businesses to have significant access to its market, whatever the agreement may say.
The trade imbalance now sees China selling Canada $64 billion in goods a year, with only $20 billion in Canadian goods going the other way. An FTA would only widen that disparity.
More than that, China will insist on unimpeded access for its investments in the Canadian economy, especially by its state-owned enterprises. At the same time, the CCP will make darned sure Canadian investors never get a foot in the door in China.
So there might be cause for relief that Justin Trudeau’s poorly-managed trip to Beijing this week did not immediately fire the starter’s gun on bilateral free trade talks after his meeting with Premier Li Keqiang on Monday.

4 December
No China-Canada trade deal yet in sight, ex-diplomat says (video)
Canada and China are unlikely to reach a trade deal soon as Beijing won’t make concessions on key issues, says Jeremy Kinsman of Ryerson University.

JK comments: Here’s a hit for the good people at CNBC Asia, done the day before PM Trudeau began talks on a trade agreement which couldn’t really agree on very much. Trudeau says it was no single issue that got in the way of launching formal negotiations. But Canada has to decide what it expects to get from a partner with a population of over a billion and an increasingly decisive global role. On the one hand, we have hesitations over a trade agreement with a still-largely state economy without having a robust and reliable dispute settlement mechanism in place. Fair enough. But we make any kind of a deal hard to pluck by extending our ambition for a “comprehensive” agreement into a goal of understandings on non-trade issues like gender equity. Canadians are solidly committed to gender equity in Canada. How are the billion-plus Chinese on this issue? Is it Canada that is going to lift their performance? Doubtful. So, NAFTA is on the ropes; we left an empty chair at the Trans-Pacific Partnership talks in November. And we are not getting traction with China. (Thank God for CETA.) Maybe we pay too much attention to our own sunny ways. On human rights, it’s always a conundrum. China, which has lifted 700 million out of poverty, figures it has got its priorities right for China. On the other hand, values that we hail as universal count for Canadians. What does seem obvious is that trade deals aren’t the vehicles for moving the rights of human rights defenders ahead. There’s a day left in Trudeau’s business trip to China, and he has to go back again and again to count as an influence. It’s very important we succeed in beneficial diversification and getting this potentially great trans-Pacific partnership of privilege right.

John Ivison: Would it be too cynical to say China just ambushed Trudeau on trade talks?
Justin Trudeau arrived in China fully expecting on Monday to announce the launch of formal free trade talks. Chinese Premier Li Keqiang wasn’t having it
“We’re pleased to continue exploratory discussions towards a comprehensive agreement,” Trudeau said, after Li had made clear the Chinese were not prepared to bend on some of the issues close to the Prime Minister’s heart. Trudeau said there was no specific issue that had unravelled a prospective deal, but that it’s clear the “people first” nature of Ottawa’s agenda did not dovetail with Chinese priorities.

11 November
Canada, 10 other Pacific nations agree on ‘core elements’ of new trade deal
(Globe & Mail) Canada and 10 other nations have agreed on the “core elements” of a new Trans Pacific Partnership trade deal, but some contentious areas – including culture and dispute settlement – were set aside for further negotiation.
The late-night deal was reached on the sidelines of the Asia-Pacific Economic Co-operation (APEC) forum in Danang, Vietnam. It came just hours after Prime Minister Justin Trudeau was accused of blocking an agreement earlier in the day.
The political drama included a scheduled meeting of TPP leaders that Mr. Trudeau did not attend and that was ultimately cancelled, leading to international media reports that Canada had “screwed” its TPP allies after getting cold feet.
Canada’s Trade Minister François-Philippe Champagne dismissed the reports as a “misunderstanding” and said Canada took the time it needed to push for stronger protections related to the environment and labour.
“This is Canada. We won’t settle for just any deal,” he told reporters Friday. “This is about making sure that Canada as a Pacific nation would have access to the markets in the Pacific region. This about setting also the terms of trade in the region.”

19 July
François-Philippe Champagne has things to say
Canada’s trade minister talks (and talks) to Paul Wells about his globe-trotting efforts to promote Canada, and why it matters now
“I often say, trade, you have to look over decades. So obviously you have things which are happening now—CETA is there.” CETA is the shiny new trade deal between Canada and the European Union, negotiated while Stephen Harper was prime minister, consummated under Champagne’s predecessor Chrystia Freeland, finally due to come into force, most of it anyway, in September.
“But I just came back from Pacific Alliance in Colombia, what, two weeks ago?” The Pacific Alliance is a free-trade area, with ambitions to be more, that Chile, Colombia, Mexico and Peru formed in 2011. All four countries have Pacific Ocean waterfront. Canada became the first non-Latin American observer to the organization in 2012.
I looked all of this up later. Meanwhile, Champagne was still talking. “And this is about the future. This is about Canada being first again. We were the first non-regional observers, I would say. And now we wanted to be first again, in the first pack of associate members.
“Now Mercosur is coming up, as you know, which we’re looking at.” Mercosur is Argentina, Paraguay, Uruguay and Brazil, with Venezuela currently in the penalty box because bad things are happening there. “You know, those are big markets.” Champagne’s department has held consultations about seeking a free-trade agreement with Mercosur.

28 April
Feds hope China softwood mission sends message to U.S
(CTV) A recent trade mission pitching Canadian softwood lumber to China was intended to serve as a message to the United States, International Trade Minister François-Philippe Champagne told CTV’s Power Play.
Asked if the trip was meant to show other countries are interested in Canadian wood, Champagne said it was.
“Well, it is a strategic message. In my view … even before what happened in the U.S., we realized it’s in our best interest to diversify our markets,” he said.

31 January

CETA comes into force.

(Open Canada) On Oct. 30, Justin Trudeau, together with President of the European Council Donald Tusk and President of the European Commission Jean-Claude Juncker, signed the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. While hailed as a victory in many circles for Trudeau and his trade minister, Chrystia Freeland, much of the groundwork for the agreement was laid by former prime minister Stephen Harper’s government. Between CETA and the North American Free Trade Agreement, Canada would have preferential access to more than half of the world’s economy — though this hasn’t stopped CETA’s anti-globalization critics from voicing their opposition.
For CETA to enter into force, the European Parliament must agree to it in a vote — the result of which is by no means pre-ordained — scheduled for February. Even with a stamp of approval from the European Parliament, CETA will still need approval from the EU’s 28 member states and Belgium’s regions. So while the Canadian government’s website states that “both Canada and the EU are committed to the timely ratification and implementation of CETA so that Canadians and Europeans alike can take advantage of its benefits as soon as possible,” it remains to be seen whether CETA’s coming into force will actually happen in 2017. (December 21 2016)

Stéphane Dion to be Canada’s ambassador to EU, Germany
Mr. Dion was known to be unhappy to have been dropped from cabinet in the recent shuffle and had considered taking up a teaching position at the University of Montreal “under very attractive conditions.”
However, Mr. Dion told the House of Commons in a farewell address Tuesday that the call of public service as Canada’s senior diplomat in Europe drew him back.
“I don’t have to explain to anyone here how much of an adrenalin rush we all get from taking action or just how irresistible the call to public service [is], especially when that call comes from your Prime Minister,” he said.
“In its own way, the European continent is facing the same challenges as us, ensuring that openness and inclusion triumphs over exclusion and xenophobia, ensuring a path to inclusive growth and demonstrating that free trade can be combined with workers’ rights and respect for the environment,” he said. “At this critical time, I will do my part to strengthen Canada’s relationship with Europe. It will be an honour to join the Canadian diplomatic work force.”
EXCLUSIVE: Dion not properly briefed on human rights before Saudi arms deal
(National Observer) A federal court’s decision against a judicial review of Canada’s weaponized vehicle exports to Saudi Arabia may be appealed, in part, due to new information about the $15-billion deal uncovered by National Observer.
Documents obtained under access to information legislation indicate that Stéphane Dion, the foreign affairs minister who signed the controversial export permits last year, was never fully informed by his team of human rights experts about the severity of human rights abuses in Saudi Arabia.
That information — contained in a series of heavily-censored reports — contradicts federal Justice Danièle Tremblay-Lamer’s ruling last Tuesday that at the time, Global Affairs Canada was “unanimous in recommending to the minister that the export permits be issued,” said University of Montreal law professor Daniel Turp.

Challenges for Canada
23 January
Trump pulls U.S. out of TPP, will renegotiate NAFTA ‘at the appropriate time’
President repeats campaign pledges on trade protectionism, business-friendly measures
[With Choice of Trade Negotiator, Trump Prepares to Confront Mexico and China]
10 January
Meet François-Philippe Champagne, Trudeau’s new trade minister
Before his big cabinet promotion, Champagne talked economic policy with Maclean’s
Chrystia Freeland takes over Foreign Affairs as Trudeau shuffles cabinet
François-Philippe Champagne becomes minister of international trade.
francois-philippe-champagnFrançois-Philippe Champagne
François-Philippe Champagne has been a strong lieutenant of Finance Minister Bill Morneau over the past year, and will now take a seat at the cabinet table as the minister of international trade.
Champagne takes over the hot file as support for global trade wanes in much of the Western world amid an ascendency of protectionist rhetoric.
Champagne has one notable supporter in his corner: former prime minister Jean Chrétien. Both Champagne and Chrétien hail from Shawinigan, in rural Mauricie area of Quebec, and the Liberal lion encouraged the lawyer turned international businessman to run in the last election.
“He worked in Europe, around the world,” Chrétien recently said in French in an interview with Quebec paper Le Nouvelliste, which recently named Champagne “person of the year.”
“He came to see me, he explained to me that one day he would like to practice politics,” Chrétien said.
“I encouraged him. I gave him my advice. He worked very hard, returned to his home, prepared himself and was elected. He does very well in Ottawa; everyone says it. I am very proud of him. He understands that it is not easy and that you have to work.”
Champagne, 46, worked abroad in the field of green technology and as a vice-president and senior counsel at ABB Group, a multinational Swiss conglomerate.
He was awarded the Young Global Leader award at 2009 World Economic Forum.

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